A growth strategy is an approach to stock investing that seeks to benefit from companies whose share prices appreciate in value because of increasing sales and profitability of the companies operations. The classic kinds of growth stocks are start-up companies engaged in leading edge research and development and are striving to bring new and successful products and services to markets. During the start-up and research and development phase these companies often have no or very low sales and much of the capital may be from venture capital sources. Biotech and technology companies in other spheres are often such companies. A growth strategy usually requires the investor to research companies looking for growth potential that other investors have not yet discovered and that is not yet reflected in the stock price. In light of all the great and clever minds involved in researching companies for an individual investor trying to take all the professionals on – that’s quite a tall order. Growth strategies are often considered somewhat adventurous, high risk but hopefully will offer high rewards. At least that is the hope.
